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#2251885 - 04/06/21 05:51 PM Condo Flood Policy
parr04 Offline
Gold Star
Joined: Aug 2004
Posts: 379
oklahoma
I have a flood insurance policy for a large condo complex. The amount of coverage is ok.
The only issue I see is that our flood certification shows the property to be in zone VE but the policy shows the Flood Risk/Rated Zone as AE but the current zone shows VE.

Should the policy be rated as zone VE as well?

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Flood Compliance
#2251890 - 04/06/21 06:22 PM Re: Condo Flood Policy parr04
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,612
The existing Flood Q&As say that you needed to investigate discrepancies only if the risk-zone ratings are different.

"71. What should a lender do when there is a discrepancy between the flood hazard zone designation on
the flood determination form and the flood insurance policy?

[Answer:] A lender should only be concerned about a discrepancy on the Standard Flood Hazard
Determination Form (the SFHDF) and the one on the flood insurance policy if the discrepancy is between
a high-risk zone (A or V) and a low- or moderate-risk zone (B, C, D, or X). In other words, a lender need
not be concerned about subcategory differences between flood zones on these two documents."


That said, the proposed (not final) Q&As now say this:

"ZONE 2. Is a lender in violation of the Regulation if there is discrepancy between the flood zone on the SFHDF and the flood insurance policy declarations page?
No, a lender is not in violation of the Regulation if there is a discrepancy between the flood zone on the SFHDF and the flood zone on the policy declarations page. As provided in Q&A Zone 1, a lender should consider documenting any zone discrepancy in the loan file."
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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#2251891 - 04/06/21 06:30 PM Re: Condo Flood Policy parr04
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,618
Galveston, TX
the policy shows the Flood Risk/Rated Zone as AE but the current zone shows VE.

Sounds like a grandfathered policy. - But as Adam pointed out - they are both high risk so it should not be an issue.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2251892 - 04/06/21 06:42 PM Re: Condo Flood Policy rlcarey
parr04 Offline
Gold Star
Joined: Aug 2004
Posts: 379
oklahoma
Thanks for your responses...

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